Technology has rapidly transformed the property market
with sellers and estate agents turning to online auctions as an avenue for completing
sales. Buying your home by auction can seem
to be a nerve-wracking venture but if something catches your eye don’t be
afraid; these 7 simple tips will help you wind your way through the process:
1. View the house. As with every
sale it’s highly recommended that you view the property, even if it’s a virtual
viewing. If the property is not available
to view be aware that it could have major structural issues not evident in a picture. Getting a fixer upper is one thing. Buying a house that is structurally unsound
is a completely different matter.
2. Know your
rights. If you are buying land with a view to building
for example, you must make sure that you can get planning permission. There would be nothing worse than buying the
property for your dream home and then discovering that you cannot build on it. Get your solicitor involved from day
one. The estate agent will make legal
documents available for the auction so make sure you download them and get your
solicitors opinion before the auction starts.
3. Scout the
area. Another potential hazard to buying your home at
auction is not knowing anything about the area.
It would be well worth your time to do some investigating. Is the property in an area that is prone to
flooding for example? If you can’t visit
the area in person, google maps is a great tool. You may also find information on the county
council websites.
4. Stay
cool. Don’t get caught up in the heat of the moment. You may find yourself getting very excited during
the auction. Don’t get carried
away. Stick to your budget and if
someone else wants the house more than you do, let it go. As the saying goes, it just wasn’t for you.
5. Remember the
contract. There are two types of online bids: “Binding” and “non-binding”. “Binding” means that you have placed a bid
with intent to buy, so if you don’t live up to your end of the deal you may be
liable to serious legal consequences. The
“non-binding” bids, sometimes called “private treaty” sales simply mean that, up
until when you enter the contract, you cannot be pursued if you fail to
complete on the transaction. As with every legal matter, please consult your
solicitors before making any decisions.
6. Talk to your
bank. If you are getting a mortgage, be very careful. Auction sales are binding which means no “subject
to loan approval” clauses. If you go
ahead and buy at auction, then find out the bank cannot lend on that property
e.g. there are tenants living there and your mortgage does not cover investment
property, you may find yourself in a very tricky legal situation. Your solicitor will again prove invaluable
here, not to mention the estate agent can guide you.
7. Talk to
others. Finally try to talk to people that have experience
with buying at auction. You can learn a
lot from the experience of others. Especially
talk to the estate agent. It’s in their
interests to secure a buyer that can complete on the transaction remember. If the property is not right for you, they
will be very forthright in telling you. Take
advice and use common sense when entering into a real estate auction.
If you follow these simple steps, you will emerge as
the winner and have a fabulous home to show for it. Best of luck.
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